workforce trends presentation 4-20-2011
TRANSCRIPT
1
Workforce Trends in Coconino County “Then and Now”
A Presentation to the Coconino County Board of Supervisors
April 12, 2011
Presentation Overview
Financial Planning Trends and Status Workforce Trends Influencing Coconino
County County Workforce Characteristics Benefit Costs Workforce Indicators (i.e. Turnover and Vacancy
Rates) 2007 4-Phase Compensation Strategy
Plan Review and Status Update Present and Future Compensation Strategy Trends Where do we go from here?
Financial Planning Trends
Many of the messages from 2007still ring true today!
County’s Financial Flexibility is Restricted and Constrained
Growth in Mandated Expenditures Due to Funding Cuts
Rising Benefits and Retirement Costs Combined with frozen merit increases = Decreasing net pay
for employees Long-Term Plan is Necessary Focus on “Mission Critical” areas:
People and Infrastructure are essential to delivering service Trends Continuing in FY12 and Beyond
Coconino County Workforce Trends
Employee Characteristics Years of Service Years to Retirement Age Diversity
Coconino County Workforce Trends
Years of Service County Wide (Total 985 Employees)
0100200300400500600
0 to 5Years
5.1 to 10Years
10.1 to 15Years
15.1 to 20Years
20.1 to 25Years
25.1 +Years
2007 20112007 2011Less than 1 Year 220 1021 - 2 Years 142 612 - 3 Years 74 953 - 4 Years 61 1174 - 5 Years 49 77
55%
46%
22% 25%
10%
15%
6% 8% 5% 4% 2% 2%
Retirement Eligibility
0
50
100
150
200
250
300
25+ 21-24 16-20 11-15 6-10 0-5 NOW
Years Remaining until Retirement
Nu
mb
er
of
Em
plo
ye
es
2007 (All retirement systems)2011 ASRS2011 PSPRS2011 CORP
Coconino County Workforce Trends
Coconino County Workforce Trends
Employees by Age Group Comparison 2007 & 2010
0
50
100
150
200
250
300
350
16 to 19 20 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 andover
2007 2010
Coconino County Workforce Trends
Employment Projections by Age Group
05,000
10,00015,00020,00025,00030,00035,00040,000
16 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 andolder
1988 1998 2008 2018
Workforce Trends-US Labor Force
Group
Level Change
1988 1998 2008 2018 1988-981998-2008
2008-18
16 to 24 22,536 21,894 22,032 21,131 -642 138 -901
25 to 34 35,503 32,813 33,332 36,814 -2,690 519 3,482
35 to 44 29,435 37,536 35,061 34,787 8,101 -2,475 -274
45 to 54 19,104 28,368 36,003 34,343 9,264 7,635 -1,660
55 to 64 11,808 13,215 21,615 28,754 1,407 8,400 7,139
65 and older 3,285 3,847 6,243 11,082 562 2,396 4,839
Table 3.4 Civilian U.S. labor force by age-1988, 1998, 2008 and projected 2018 [Numbers in thousands]
Workforce Trends-US Labor Force
0100200300400500600700800
Black White Hispanic Asian AmericanIndian
Males Females
Coconino County Workforce Trends
Diversity – Ethnicity & Gender
1%
74%
13%1%
11%
Benefit Costs
NAPEBT Health PremiumTrend versus National Health Premium Trend
$0
$100
$200
$300
$400
$500
$600
95-96
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
Plan Year
Mo
nth
ly E
mp
loye
e R
ate
NationalTrendNAPEBT
Benefit Costs
Northern Arizona Public Employees Benefit TrustHistorical Expenses and Budgets - Medical/Pharmacy
$2
5,9
34
,04
5
$2
4,0
77
,02
7
$2
2,6
34
,24
7
$2
0,0
22
,67
7
$25,230,167$25,746,105$23,219,887
$24,825,241
-$500,000
$4,500,000
$9,500,000
$14,500,000
$19,500,000
$24,500,000
2006-2007 2007-2008 2008-2009 2009-2010
Net Medical/Rx Claims Admin/Stop Loss/Other
IBNR Reserve Change Trust Contributions
Benefit Costs
Retirement Contribution Rates-Employer
0.00%5.00%
10.00%15.00%20.00%
25.00%30.00%35.00%40.00%
FY 05 FY 06 FY 07 FY 08 FY09 FY10 FY11 FY12
ASRS PSPRS CORP EORP AOC
Benefit Costs
Retirement Contribution Rates-Employee
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
12.00%
FY 05 FY 06 FY 07 FY 08 FY09 FY10 FY11 FY12
ASRS PSPRS EORP CORP/AOC
Benefit Costs
FY1210.75
%
FY119.85
%
FY109.40
%
FY099.45
%
FY089.60
%
FY079.10
%
ASRS Contribution Rates-Projected
8.00%
8.50%
9.00%
9.50%
10.00%
10.50%
11.00%
11.50%
12.00%
ASRS Rate ASRS Rate (Projected)
Key Workforce Indicators/Measures
Vacancy Rate Turnover Rate Turnover Rate Comparisons Employee Reasons for Leaving Costs of Turnover Impacts of Turnover
Key Workforce Indicators/Measures
Coconino County Vacancy Rate History
9% 9%
12%
9%
0%
2%
4%
6%
8%
10%
12%
14%
FY08 FY09 FY10 FY11*Hiring chill/ Vacancy Review Board
Key Workforce Indicators/Measures
0%
5%
10%
15%
20%
25%
30%
35%
Calendar Turnover Rate
1998
2000
2002
2004
2006
2007
2008
2009
2010
Coconino County Turnover History
Key Workforce Indicators/Measures
Turnover Trends: FY08 - Present
0%1%2%3%4%5%6%7%
RecessionPay Plan
FY09
FY10
0.00%
5.00%
10.00%
15.00%
20.00%
City of Flagstaff - Excludes Retirements
Northern Arizona University
Coconino County
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
CY2009
State of Arizona (Census)
Coconino County (Census)
Coconino County
Key Workforce Indicators/Measures
Local Turnover Rate Comparisons
Actual Turnover by Category
0
50
100
150
200
LAYOFFS 10 3 10 0
INVOLUNTARY 10 19 8 12
RETIREMENT 11 27 12 29
VOLUNTARY 154 119 74 95
CY07 CY08 CY09 CY10
Key Workforce Indicators/Measures
WHY ARE EMPLOYEES LEAVING? 2007 Top Reasons for Leaving: 1) Taking
Another Job in the Same Market; 2) Personal Reasons; 3) Cost of Living Over 66% Rated Compensation “Poor” or
“Fair”
2010 Top Reasons for Leaving: 1) Job Opportunity; 2) Cost of Living/Moving out of Area 82% rated compensation as “Fair” or “Poor”
Key Workforce Indicators/Measures
The Costs of Turnover
2007 Annual Turnover Cost: $6.5 million Based on Median Annual County Salary
of $37,000
2010 Annual Turnover Cost: $4.6 million Based on Median Annual County
Salary: $39,938
Turnover Cost: Between 75% and 125% of Annual SalaryConservative Estimate Using 75% of Median Annual Salary
Key Workforce Indicators/Measures
Impacts of Turnover
Reduces Customer Service Hurts Employee Morale Reduces Efficiency Hurts Performance Lowers Effectiveness
Key Workforce Indicators/Measures
Market Information
-50%
-30%
-10%
10%
30%
50%
0 5 10 15 20
% of Market Median 2007 Median
Distribution of Employee Salaries Compared to Market
Employee Salaries Compared to Market as of 1/1/07
-40%
-30%
-20%
-10%
0%
10%
20%
30%
-5 0 5 10 15 20 25 30 35 40 45
Years of Service
% B
elo
w /
Ab
ove
mar
ket
Market Information
Market Information
-50%
-40%-30%
-20%-10%
0%
10%20%
30%40%
50%
0 5 10 15 20 25 30 35 40
Years of Service
% B
elo
w /
Ab
ove
Mar
ket
Employee Salaries Compared to Market as of 1/1/2011
National Workforce Trends
Labor force not meeting job market needs 2011 median base salary projected to increase
2.8%(2010 Hay Salary Survey) 98% of companies say they plan to award base pay
increases in 2011 (Mercer 2010-2011 US Compensation Planning Survey)
Private industry growth in earnings (2009) = 2.2%
SHRM-recommended top initiatives for 2011: Focus on Succession Planning and Talent
Acquisition Lift Pay Freezes Find Innovative Approaches/Non-Monetary Rewards
Workforce Trends Summary
Our Reality: The Cost of Living in Coconino County
Continues to be a challenge 27% more expensive than Phoenix 15.1% higher than national average
The Workforce Age Population in Coconino County Continues to Decrease Shrinking labor pool combined with loss of
knowledge retention
Workforce Trends Summary
Key Issues in 2007 – Same Going Forward
High Turnover Turnover high in comparison to our market Turnover is expensive
Compensation is Below Market Higher Health Care and Retirement
Costs Affect Employer and Employee
County Compensation Strategy
Goals: Improve Service to the Public Strengthen the Overall Workforce Reduce Wasted Costs of Turnover
“Quality People = Quality Service”
County Compensation Strategy
COCONINO COUNTY EMPLOYEE COMPENSATION STRATEGY PLAN Status – FY11
Phase One: Movement Towards a Market Competitive Salary Structure
Phase Two: Review Job Classifications and Continue Movement Toward Market
Phase Three: Remain Competitive, Become Performance-Based
Ongoing Maintenance of Market Competitive Salary Structure
1. Revise the Salary Structure Four Steps: - Adjust Salary Structure - Increase Salaries to New Minimums - Increase Salaries Based on Tenure - Increase Salaries for Current Market
Movement
2. Continue to implement the 2.5% increase on an employee’s anniversary date.
3. Identify and Adjust Temporary “Market Premium” Job Classifications
4. Establish Compensation System Performance Measures
1. Continue Salary Structure
Movement - Raise Salary Ranges Toward
Market Target - Identify and Adjust Temporary
“Market Premium” Job Classifications
- Evaluate Systems Performance 2. Review and Update Job
Classifications and Evaluate all Incumbent’s Duties
90% complete – Present for approval by BOS as part of FY12 Budget
3. Develop and Implement Employee Performance Management System
1st year pilot completed 4. Examine Other Causes of Turnover
Beyond Salary
Ongoing (See below**) 5. Explore Alternative Labor Pools
Ongoing (job sharing and part-time opportunities; under-filling)
1. Develop and Adopt Pay
Delivery System To Provide For Systemic Movement within the Salary Range (show how pay will move as skills, competency and performance improves over time) Included as part of
Performance Management Program
2. Continue Employee Performance Management System Ongoing
3. Develop and Distribute Information on Total Compensation, Including Salary and Benefits
4. Continue Salary Structure Movement
- Evaluate System Performance - Identify and Adjust For “Market
Premium” Job Classifications Ongoing (Nursing; Sheriff’s
Office)
Continue Salary
Structure Movement Raise Salary Ranges
Toward Market Provide Performance-
Based Increases Identify and Adjust
Temporary “Market Premium” Job Classifications
Evaluate System
Performance
** Implemented Premier Employer Committee to develop recruitment and retention strategies; enhanced recruitment process and training; implemented 1-year recruitment and retention survey; criteria-based promotional opportunities.
County Compensation Strategy
Salary adjustments based on merit, market & tenure provided July 1, 2007 (FY08).
Increased market placement 2.5% merit increases built
into County base budget Provided in FY09
Market premium compensation plans developed for Sheriff’s Office, Nursing classifications and County Attorney
Performance Measures Vacancy & Turnover Rates Exit Interview Questionnaire
Results Market Survey
Phase One: Movement Towards a Market Competitive Salary Structure
1. Revise the Salary StructureFour Steps:- Adjust Salary Structure- Increase Salaries to New Minimums- Increase Salaries Based on Tenure- Increase Salaries for Current Market Movement
2. Continue to implement the 2.5% increase on an employee’s anniversary date.
3. Identify and Adjust Temporary “Market Premium” Job Classifications (Nursing; Public Safety)
4. Establish Compensation System Performance Measures
County Compensation Strategy
Merit Increases provided in FY09 – Frozen in FY10 and FY11
Pending Hay Study Implementation - Salary range maximums lifted
Hay Study began FY09 to present day: All classifications reviewed
and placed in new, proposed structure
Classification specifications revised and new ones developed where necessary
Final classification and proposed salary plan to be presented to BOS for consideration as part of FY12 Budget.
Phase Two: Review Job Classifications and Continue Movement Toward Market
1. Continue Salary Structure Movement2.5% merit increases built into base budgetProvided in FY09 prior to being frozen in FY10 and FY11. Pending Hay Study Implementation - salary range maximums lifted
2. Review and Update Job Classifications and Evaluate all Incumbent’s Duties90% complete – Present for consideration by BOS as part of FY12 Budget
3. Develop and Implement Employee Performance Management System
1st year pilot completed
4. Examine Other Causes of Turnover Beyond Salary Ongoing (See below**)
5. Explore Alternative Labor Pools
Ongoing (job sharing and part-time opportunities; under-filling)
County Compensation Strategy
New Performance Management Program developed and piloted in Health Department. Feedback received and
revisions being made Working with IT to improve
automation 2nd pilot opened to entire
organization in 2011 Continually monitor turnover
data and trends Premier Employer Committee
developed to focus on retention
Continually looking for flexible and innovative ways to meet staffing needs Part-time; job sharing;
underfilling; phased retirement, return retirees.
Phase Two: Review Job Classifications and Continue Movement Toward Market
1. Continue Salary Structure Movement2.5% merit increases built into base budgetProvided in FY09 prior to being frozen in FY10 and FY11. Pending Hay Study Implementation - salary range maximums lifted
2. Review and Update Job Classifications and Evaluate all Incumbent’s Duties90% complete – Present for approval by BOS as part of FY12 Budget
3. Develop and Implement Employee Performance Management System
1st year pilot completed
4. Examine Other Causes of Turnover Beyond Salary Ongoing (Creation of PEC)
5. Explore Alternative Labor Pools
Ongoing (job sharing and part-time opportunities; under-filling)
County Compensation Strategy
Performance Management Program geared to provide for salary increases based on core competencies; performance. Dependent on budget
capacity Next steps for Performance
Management Program 2nd year pilot Training Handbook/Training Manual
Development Not complete:
Total Compensation Information
Salary structure frozen since FY10.
Phase Three: Remain Competitive, Become Performance-Based
1. Develop and Adopt Pay Delivery System To Provide For Systemic Movement within the Salary Range (show how pay will move as skills, competency and performance improves over time) Included as part of Performance Management Program
2. Continue Employee Performance Management SystemOngoing
3. Develop and Distribute Information on Total Compensation, Including Salary and Benefits
4. Continue Salary Structure Movement
County Compensation Strategy
All items in Phase 4 entail ongoing maintenance of a competitive and successful compensation strategy.
Revisions/additions will be made as necessary based on trend evaluation.
Ongoing Maintenance of Market Competitive Salary Structure
Continue Salary Structure MovementRaise Salary Ranges Toward MarketProvide Performance-Based IncreasesIdentify and Adjust Temporary “Market Premium” Job ClassificationsEvaluate System Performance
Moving Forward
Learning from history Decisions we make today will affect our future
Just as in 2007 Loss of intellectual capital/institutional knowledge Increased cost for recruiting and turnover Reduced employee morale
Doing more with less/Reduced net pay 2011 and beyond
Impacts from State Labor Shortages Changing labor force Lasting effects of economy
Moving Forward
Using Workforce Trend Data to Deliver a Multi-Faceted Approach Hiring “Chill” vs. “Freeze” Personal Day Purchase Program
$ saved to date $426K Phased Retirement with smartworksplus, inc. Budget Reduction & Layoff “Triage” Strategy EGAD Focus PEC Focus